Wednesday, December 03, 2014

The fuse is burning on the debt bomb

FACT: For the last several years, the US government has been spending roughly 90% of its ENTIRE tax revenue just to pay for mandatory entitlement programs and interest on the debt.This leaves almost nothing for practically everything else we think of as government.

This is almost verbatim something I've been saying on this blog forever with regard to America's intractable entitlement spending. Well, we don't need to wait to see the effects of mandatory spending crowding out all other government spending. The future of bankruptcy is in the Prairie State:

Now, to pay off its retirement debt, Illinois needs more than $6 billion a year from taxpayers to make up for the skipped contributions to the pension system, along with more than $1 billion more to pay off its pension bonds. That represents more than one-fifth of the state’s general-fund budget. By contrast, states typically spend no more than 4 percent to 5 percent of their budgets on pensions. The consequences have already been felt by Illinois taxpayers—and workers. Government employment is down by nearly 30,000 workers since its 2009 peak. Local governments, those that deliver the most basic services to taxpayers, have done the most trimming, slicing 20,000 jobs. Meanwhile, rising benefits costs are squeezing out other spending, including pay increases. School districts have been hit the hardest; their budgets are largely made up of personnel costs.

Tough nuts, kids. Your school budget will be cut now but there will be plenty of missing jobs in Illinois due to the terrible business climate to pay off all the accumulated state and federal debt. Nice.